State Consumer Disputes Redressal Commission
Arifabanu Maniyar vs Icici Prudential Life Ins Co Pvt Ltd on 29 September, 2023
Details DD MM YY
Date of Judgment 29 09 2023
Date of filing 12 05 2016
Duration 17 04 07
IN THE CONSUMER DISPUTES REDRESSAL COMMISSION
GUJARAT STATE, AHMEDABAD.
Court No. 4
Complaint No.62/16
Arifabanu Maniyar
Age: Adult,
Res.: Jain Derasar Khancho,
Rajpur, Gomtipur, Ahmedabad-380021. ...Complainant
Vs
ICICI Prudential Life Insurance Co. Ltd.
Add.: 6th& 7th floor, Abhijeet-3,
Law Garden Road, Netaji Main Road,
Mithakhali, Ahmedabad 380009 ...Opponent
APPEARANCE: V. M. Pancholi, Ld. Adv. for the complainant
Darshil Parikh for V. P. Nanavaty, Ld. Adv. for the
opponent.
CORAM: Hon'ble Mr. R. N. Mehta, Presiding Member
Hon'ble Ms. P. R. Shah, Member Order by Hon'ble Ms. P. R. Shah, Member.
1. The complainant has filed this complaint alleging deficiency in service as well as unfair trade practice on part of the opponent and has prayed as under:
(a) Be pleased to direct the opponent insurance company to pay Rs.20,00,000/- with interest at the rate of 12% per annum from the date of repudiation 09.03.2016.
(b) Be pleased to direct the opponent to pay compensation in the sum of Rs.50,000/- for mental pain and harassment to the complainant.
(c) Be pleased to direct the opponent to pay a sum of Rs.15,000/- to complainant towards the costs of this litigation.Akshay CC/62/16 Page 1 of 13
(d) Any other appropriate order may be passed looking to the facts and circumstances of the case.
2. When the matter was called out Ld. Adv. Mr. V. M. Pancholi for the complainant and Ld. Adv. Mr. Darshil Parikh for the opponent were present.
Facts of the complaint
3. The complainant's husband has obtained ICICI Prudential iProtect option I policy bearing no.19090243 for the period 13.01.2015 to 13.01.2024. Opponent has collected the premium for the said policy from the complainant and issued the certificate of insurance for the sum of Rs.20,00,000/-. Complainant is entitled to file the complaint being legal heir and nominee under the said policy. During the existence of the policy, complainant's husband died on 26.08.2015. The complainant informed the opponent about the death of her husband and filed the death claim form with all the relevant documents to claim Rs.20,00,000/- under the policy. The opponent has repudiated the claim of the complainant vide letter dated 09.03.2016.Alleging deficiency in service and unfair trade practice, the complainant has filed the complaint before this Commission.
Reply of the opponent
4. The opponent contends that the complaint is false and frivolous and the complainant has concealed material facts before this Commission and it should be dismissed as the opponent has acted within four corners of the statutory provisions and per the declarations signed by the LA and hence, no case of deficiency in service can be said to have been committed by the opponent insurance company. The opponent contends that the claim has been rightly rejected on the ground that the DLA has suppressed the material facts of holding other insurance policies of other insurance company and misrepresented his income and occupation in the proposal form and therefore, the opponent is not liable for any payment under the policy and the complaint should Akshay CC/62/16 Page 2 of 13 be dismissed. The opponent states that the life insurance policy is a contract between the insurance company and the LA, which is entered upon on the basis of the information that was provided by the LA in the proposal form along with the payment of premium amount to the insurance company. It is further contended by the opponent that if the information provided by the proposal is found untrue or fallacious, then the opponent insurance company has the right to rescind the insurance contract abintio.
5. Evidence of the complainant Sr. No. Particulars 1 Copy of Policy Schedule 2 Copy of Death Certificate 3 Copy of Doctor's Certificate 4 Copy of Repudiation Letter
6. Evidence of the opponent Sr. Particulars Date No. 1 Copy of policy along with terms and 09.03.2015 conditions 2 Copy of the proposal form 12.01.2015 3 Copy of claimant statement 13.01.2016 4 Copy of letter dated sent by Insurance Co. 20.01.2016 5 Copy of the Investigation Report along with affidavit of Investigator 6 Copy of the repudiation letter 09.03.2016 Submissions of the complainant
7. Ld. Adv. for the complainant submits that the LA died due to "Myocardial infarction" and secondary cause is cardio respiratory failure. The Doctor's certificate is submitted at page 23 to support this statement. Ld. Adv. further submits that the LA has neither suppressed any material facts nor given any incorrect information regarding his income and occupation in the proposal form. Ld. Adv. refers to the investigation report brought on record by the opponent at page 77 wherein, under the profile of the LA in the column of details other life/health insurance: it is stated "no other Akshay CC/62/16 Page 3 of 13 insurance". The Ld. Adv. further submits that the investigator has also mentioned in his report that there is "no other insurance"
under the head "LA residence check". The complainant avers that the opponent has not brought any evidence on record to support the written statement, on the alleged other policies of the complainant. It is also submitted by the Ld. Adv. that no evidence has been brought in by the opponent to prove that there was misrepresentation by the complainant of his income and occupation.
Submissions of the opponent
8. Ld. Adv. for the opponent contends that the appellant issued the policy based on the proposal form filled up by the LA, on the website of the appellant insurance company. It is stated that opponent had sent copy of the proposal form with the policy document to the complainant. However, the complainant did not approach the opponent with any grievances relating to the policy or its terms and conditions, during the free look period implying that the LA had agreed to the contents in the application form, policy, and the terms and conditions. It is further submitted that as per the investigators report, the complainant has misrepresented his occupation. The opponent contends that their investigation has further revealed that the complainant was holding several other life insurance policies of other companies worth Rs.30.38 lakhs prior to the issuance of the appellant insurance company's policy which was not disclosed by the complainant in the proposal form. It is the case of the opponent that as per the terms and conditions of the policy, any misrepresentation and suppression of material facts makes the entire policy to be voidable on the part of the opponent company.
Merits of the case
9. The undisputed facts transpiring from the records are that the LA had taken a online life insurance policy of the opponent for the period 13.01.2015 to 13.01.2024 for sum insured of Akshay CC/62/16 Page 4 of 13 Rs.20,00,000/- with yearly premium payment frequency. The complainant's husband LA died on 26.08.2015 and the complainant/nominee under the policy submitted the claim to the opponent for payment of Rs.20,00,000/- which was repudiated by the opponent vide their letter dated 09.03.2016.Relevant excerpts from the repudiation letter at page 24 are produced below:
"Please note that insurance business operates on the principle of utmost good faith and the Company relies on the details provided by the Life Assured to evaluate the risk.
While underwriting the above proposal, the Company believed/relied on the replies to specific questions (reproduced below) in the proposal for insurance dated January 12, 2015 which were answered by the Life Assured as given below:
A Personal details of the life assured Q. No. Question Answer
8. Occupation Self Employed
9. Organization Business 9a. Name of Organization Maniyar Garage
11. Designation Owner
12. Annual Income Rs.2.2 Lakhs
17. Do you have any existing life insurance cover with other companies?
If yes please provide the following details No Name of Basic Sum Base Company Assured Plan/Rider Decision Total Amount 0 *Term of acceptance (decision) Standard, Revised premium, postponed, declined, offered with modified terms Relying on the replies,/declarations provided in the proposal for insurance, the proposal was accepted and policy bearing number 19090243 was issued with Risk Commencement Date of January 13, 2015.
In accordance with the IRDAI guidelines, the Company had sent a copy of the proposal so as to enable the Life Assured to recheck his replies to the questions in the proposal. The Company never received any request for correction of any discrepancy in the details of the proposal form.
Akshay CC/62/16 Page 5 of 13The Company received the claim intimation on January 13, 2016 informing us that the Life Assured expired on August 26, 2015 i.e. within 8 months of the policy issuance due to myocardial infarction being primary cause of death and cardio respiratory failure being secondary cause of death.
In this connection, the Company conducted investigation to verify on the bonafides of the claim which revealed that within span of just 4 months, multiple insurance policies were taken on the life of the Life Assured from various insurance companies amounting to approximately Rs.50 Lakhs. It is further noted that insurance cover amounting to approximately Rs.30 Lakhs was opted prior to availing insurance cover from us and the said information was not disclosed and was suppressed in the proposal for insurance received by the Company.
Further, it is noted that the Life assured had misrepresented his income and occupation in the proposal for insurance. It is also noted that Life Assured had over stated his income in the proposal for insurance.
Having stated the above facts, we want to notify you that amongst other details of the insurance policies held/applied, correct income and occupation are material information to determine the eligibility of the Life Assured. Had the Life Assured replied to the aforesaid questions in the proposal for insurance truthfully and correctly, the Company would have declined the proposal upfront. In light of the above facts, we are constrained to repudiate your claim for the aforesaid policy and no amount becomes payable under the said policy."
10. The opponent had repudiated the claim of the complainant on the grounds of (1) misrepresentation of income and occupation and (2) holding of other life insurance companies policies. The issue for consideration before this Commission is whether the complainant has been able to establish on any ground, deficiency in service by the opponent, to fasten liability on the opponent. (A) Misrepresentation of income and occupation
11. The opponent contends that the DLA has misrepresented his income and occupation in the details filled up by the DLA in the online proposal form. The annual income mentioned by the DLA in the proposal form is Rs.2.2 lakhs. It is the say of the opponent that since the LA's death occurred within a span of 7 months from the policy issuance, the opponent as per the statutory rights got the claim verified through the investigator Mr. Vijay Goud, of Ineffable Innovative investigator's LLP. The complainant in the proposal Akshay CC/62/16 Page 6 of 13 form has mentioned that his annual income is Rs.2.2 lakhs and in his occupation had stated that he was the owner of the garage named "Maniyar Garage". The investigator's report with affidavit of the investigator is submitted at page 77. The investigator's report on page 81 states that LA was a auto rickshaw driver and was driving auto rickshaw, on rental basis and that the LA was not having any fixed income. The investigator on affidavit at page 86 had stated that:
"5. During my course of investigation, I came to know that the life assured was not an Owner of the Maniyar Garage and that he was a Auto Rickshaw driver.
6. That there is no Maniyar Garage in existence and that the Life assured never owned it.
7. That the Life assured was not earning an income of Rs.2.2 lakhs per annum but only a roundabout of Rs.50-60 thousand per annum."
12. Thus it is amply clear from the investigator's report that the DLA had misrepresented his income and occupation. The Ld. Adv. for the complainant defended the income statement of the DLA by the averment that since the income was low, no supporting papers have been submitted. This averment does not have any substance. The complainant states in the rejoinder that the DLA was the owner of "Maniyar Garage", and the contents of the investigation report are not true and correct and are denied. The complainant has not led any documentary evidence to prove that the DLA was having an income of Rs.2.2 lakhs and , was the owner of "Maniyar Garage", as was stated in the proposal form by the LA. The complainant has not led any cogent evidence to counter the findings of the investigator's report that the DLA has misrepresented his income and occupation. Therefore, in our opinion the opponent has been successful in establishing that the DLA has misled the opponent by providing incorrect information of his income and occupation. The opponent has been able to justify the repudiation of the claim on the ground of misrepresentation by the DLA on his income and occupation.
Akshay CC/62/16 Page 7 of 13(B) Other Policies
13. It is contended by the Ld. Adv. of the opponent, that their investigation revealed that within a span of just 4 months multiple insurance policies were taken on the life of LA from various insurance companies amounting to approximate Rs.50,00,000/-. It is further contended that the DLA had opted for an insurance cover of approximately Rs.30,00,000/- prior to availing insurance cover from the opponent and the said information was not disclosed and was suppressed in the proposal form for insurance received by the opponent.
14. The opponent has supported this contention by giving information at page 32 on the details of the holdings of the life insurance policies by the LA which is shown in the table below:
HDFC MAX HDFC
Insurance Company (prior to ICICI (prior to ICICI (prior to ICICI HDFC Aviva
policy) policy) ICICI policy)
Policy Number 16389271 883161739 16819980 19090243 17612089 10245120
Risk
Commencement 28.10.2013 03.11.2013 25.04.2014 13.01.2015 01.07.2015 24.07.2015
Date
Sum Assured 10,08,708 8,30,000 12,00,000 20,00,000 25,00,000 25,00,000
15. It is further contended by the opponent that to the specific question 17 in the proposal form, "Do you have any existing life insurance cover with other companies" "if yes, please provide the details of the name of the company, basic sum assured, total amount etc.", the LA had answered in the negative. It is alleged that LA has failed to disclose such material facts to the opponent and thus breached the conditions of the policy.
16. The complainant has countered this contention in the rejoinder and has denied that there was any misrepresentation or suppression in the proposal form by the DLA. The complainant Akshay CC/62/16 Page 8 of 13 states that the contention of the opponent on the holding of the other policies by the LA is not true and correct and is denied by the complainant. It is averred by the complainant that the opponent must have to prove the said facts with evidence. The complainant to support his averment has drawn note to the investigator's report at page 77 where the investigator has mentioned under details of other insurance that there is no other insurance. It is the case of the complainant that the investigator's report has not revealed any information on other policies as alleged by the opponent.
17. We agree with this submission of the complainant that the opponent must support the allegation of other policies with evidence of the holdings of the DLA. Mere statement of the other policies in the WS does not support the case of the opponent.
18. It is pertinent to mention here that the WS of the opponent merely gave details of other policies. There was no supporting evidence along with documents to prove that the DLA had indeed the holdings of other insurance policies.
19. It is to be noted that at a later date, the opponent submitted "an additional affidavit in support of the WS at page 90. The Ld. Adv. for the complainant resisted this and stated that since it was not part of the evidence with the WS, it cannot be considered. However, it is required to note here that this "additional affidavit in support of WS" has been received by the Ld. Adv. of the complainant without objection, and it has been recorded by this Commission. Therefore, this affidavit with additional documents cannot be discarded by this commission.
20. The additional evidence affidavit states that the authorized officer of the opponent had sent an electronic mail from his official e-mail id to different insurance companies, requesting for the necessary details of the holdings of the life insurance policies by the DLA. It is stated that in response to the said electronic mail, the opponent insurance company received responses from MAX Life, Bharti AXA Akshay CC/62/16 Page 9 of 13 Life and AVIVA Life. The hard copies of the e-mail correspondence is attached with the affidavit.
21. From the perusal of the e-mails submitted by the opponent, it is evident that the DLA, has holding of multiple policies from various life insurance companies. Details with respect to the policy, RCD, sum assured etc. are revealed in the e-mail communications.
22. The opponent has thus proved beyond doubt that the LA has suppressed information that, he was possessing multiple life insurance policies from various insurance companies prior to availing insurance cover from the opponent, and had also taken policies of other life insurance companies after availing policy of the opponent. The complainant has neither led evidence to counter this contention nor denied with any cogent evidence, the holding of other policies of various companies as contended by the opponent. The burden of proof is on the complainant to produce evidence to counter the evidence led by the opponent, to support the contention that the DLA has not suppressed any information related to other policies. The complainant has failed to do so.
23. It is submitted by the opponent that non-disclosure by the LA has a direct impact on the company's decision to provide the policy to him. It is contended that, had the LA disclosed the fact that he was already having many policies from other companies too, the opponent would not have issued him another policy. The opponent submits that in view of the violation of terms and conditions of the policy, the complainant is not entitled to receive any claim amount from the opponent.
24. We have perused the complaint, the written statement of the opponent, evidence brought on record by both the parties, rejoinder of the complainant and heard the rival submissions of parties. It is well known that the contract of insurance is a contract of utmost good faith on both sides which is defined in Section 45 of the Insurance Act. It is obligatory on both parties of the contract to disclose all material facts related to the contract to Akshay CC/62/16 Page 10 of 13 the other party failing which, the insurance contract is voidable on the ground of suppression or misrepresentation of material facts. In fact, by signing the proposal form, the insured makes the declaration to this effect.
25. From the above discussions and observations, it emerges that the complainant's claim that the DLA has not misrepresented his income and occupation in the proposal form is unsupported by any evidence. Further, the complainant has not presented any defence against the contentions of the opponent that the DLA has suppressed information on the holding of life insurance policies of various other companies worth around Rs.50,00,000/- out of which Rs.30,00,000/- of insurance cover was taken prior to availing the policy of the opponent. Breach on the part of the LA is established.
26. It is pertinent to take reference to Apex Court judgment and order in Reliance Life Insurance Co Ltd and Anr v/s Rekhaben Nareshbhai Rathod in Civil Appeal No.4261 of 2019 wherein it is held :
27In the present case, the insurer had sought information with respect to previous insurance policies obtained by the assured. The duty of full disclosure required that no information of substance or of interest to the insurer be omitted or concealed. Whether or not the insurer would have issued a life insurance cover despite the earlier cover of insurance is a decision which was required to be taken by the insurer after duly considering all relevant facts and circumstances. The disclosure of the earlier cover was material to an assessment of the risk which was being undertaken by the insurer. Prior to undertaking the risk, this information could potentially allow the insurer to question as to why the insured had in such a short span of time obtained two different life insurance policies. Such a fact is sufficient to put the insurer to enquiry. 28 Learned counsel appearing on behalf of the insurer submitted that where a warranty has been furnished by the proposer in terms of a declaration in the proposal form, the requirement of the information being material should not be insisted upon and the insurer would be at liberty to avoid its liability irrespective of whether the information which is sought is material or otherwise.
For the purposes of the present case, it is sufficient for this Court to hold in the present facts that the information which was sought by the insurer was indeed material to its decision as to whether or not Akshay CC/62/16 Page 11 of 13 to undertake a risk. The proposer was aware of the fact, while making a declaration, that if any statements were untrue or inaccurate or if any matter material to the proposal was not disclosed, the insurer may cancel the contract and forfeit the premium.MacGillivray on Insurance Law20 formulates the principle thus:
"... In more recent cases it has been held that all-important element in such a declaration is the phrase which makes the declaration the ―basis of contract. These words alone show that the proposer is warranting the truth of his statements, so that in the event of a breach this warranty, the insurer can repudiate the liability on the policy irrespective of issues of materiality"
29 We are not impressed with the submission that the proposer was unaware of the contents of the form that he was required to fill up or that in assigning such a response to a third party, he was absolved of the consequence of appending his signatures to the proposal. The proposer duly appended his signature to the proposal form and the grant of the insurance cover was on the basis of the statements contained in the proposal form. Barely two months before the contract of insurance was entered into with the appellant, the insured had obtained another insurance cover for his life in the sum of Rs 11 lakhs. We are of the view that the failure of the insured to disclose the policy of insurance obtained earlier in the proposal form entitled the insurer to repudiate the claim under the policy.
27. The ratio laid down by the Apex Court in the above judgment is that non-disclosure by the insured, in the proposal form, on the information on policies obtained earlier, entitles the insurer to repudiate the claim under the policy. Ratio laid down in the above case is squarely applicable to the case on hand. In light of the above, we are of the opinion that the complainant has breached the policy on 2 grounds: (1) misrepresentation of income and occupation and (2) suppression of information related to holdings of various other life insurance company policies. The complainant has failed to lead any evidence to establish deficiency in service, and to fasten any liability on the opponent. The opponent has led evidence and has been able to establish that the repudiation was not arbitrary and was rightly done under the policy terms and conditions and in accordance with section 45 of the Insurance Act. We are of the opinion that the complaint is devoid of merits as it Akshay CC/62/16 Page 12 of 13 lacks sufficient evidence and therefore, it requires to be dismissed. In the interest of justice, we pass the following order.
ORDER
1. The Complaint no.62/16 is hereby dismissed for want of sufficient evidence.
2. No order as to cost.
3. Registry is directed to send certified copy of this judgment to the parties free of cost.
Pronounced in open court today on 29.09.2023 P.R.Shah R. N. Mehta Member Presiding Member Akshay CC/62/16 Page 13 of 13